Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 13, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | ENVIRO VORAXIAL TECHNOLOGY INC | |
Entity Central Index Key | 1,043,894 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 33,464,497 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,015 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 153,526 | $ 182,916 |
Accounts receivable | 41,478 | 24,900 |
Inventory, net | 377,956 | 420,110 |
Prepaid expense | 5,825 | 5,825 |
Total current assets | 578,785 | 633,751 |
FIXED ASSETS, NET | 38,401 | 55,145 |
OTHER ASSETS | 10,026 | 10,026 |
Total assets | 627,212 | 698,922 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 271,056 | 406,873 |
Accrued expenses - related party | 1,254,511 | 1,095,331 |
Deposits | 627,890 | 465,290 |
Total liabilities | $ 2,153,457 | $ 1,967,494 |
COMMITMENTS AND CONTINGENCIES (See Note F) | ||
SHAREHOLDERS' DEFICIT : | ||
Common stock, $.001 par value, 42,750,000 shares authorized; 33,464,497 and 33,464,497 shares issued and outstanding as of September 30, 2015 and December 31, 2014 | $ 33,465 | $ 33,465 |
Additional paid-in capital | 14,947,209 | 14,946,214 |
Accumulated deficit | (16,506,919) | (16,248,251) |
Total shareholders' deficit | (1,526,245) | (1,268,572) |
Total liabilities and shareholders' deficit | $ 627,212 | $ 698,922 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common Stock Par value (per shares) | $ 0.001 | $ 0.001 |
Common Stock Shares Authorized (In shares) | 42,750,000 | 42,750,000 |
Common Stock Shares Issued (In shares) | 33,464,497 | 33,464,497 |
Common Stock Shares Outstanding (In shares) | 33,464,497 | 33,464,497 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 59,972 | $ 25,150 | $ 613,846 | $ 511,757 |
Cost of goods sold | 3,469 | 2,550 | 155,603 | 140,762 |
Gross profit | 56,503 | 22,600 | 458,243 | 370,995 |
Costs and expenses: | ||||
General and administrative | 64,311 | $ 206,716 | 305,928 | 394,799 |
Consulting expense | 5,755 | 6,750 | 5,714 | |
Payroll expense | 157,125 | $ 138,046 | 389,730 | 403,538 |
Total costs and expenses | 227,191 | 344,762 | 702,408 | 804,051 |
Loss from operations | (170,688) | (322,162) | (244,165) | (433,056) |
Other expenses: | ||||
Interest expense | (5,452) | (3,610) | (14,503) | (10,898) |
Total other expense | (5,452) | (3,610) | (14,503) | (10,898) |
Net (Loss) before provisions for income taxes | $ (176,140) | $ (325,772) | $ (258,668) | $ (443,954) |
Provisions for income taxes | ||||
NET (LOSS) | $ (176,140) | $ (325,772) | $ (258,668) | $ (443,954) |
Weighted average number of common shares outstanding - basic and diluted | 33,464,497 | 33,464,497 | 33,464,497 | 33,464,497 |
(loss) per common share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.01) | $ (0.01) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' DEFICIT (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Begining Balance at Dec. 31, 2014 | $ 33,465 | $ 14,946,214 | $ (16,248,251) | $ (1,268,572) |
Begining Balance Shares at Dec. 31, 2014 | 33,464,497 | 33,464,497 | ||
Options issued to employees | $ 995 | $ 995 | ||
Net loss | $ (258,668) | (258,668) | ||
Ending Balance at Sep. 30, 2015 | $ 33,465 | $ 14,947,209 | $ (16,506,919) | $ (1,526,245) |
Ending Balance Shares at Sep. 30, 2015 | 33,464,497 | 33,464,497 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (258,668) | $ (443,954) |
Adjustments to reconcile net loss to net cash provided by (used in)operating activities: | ||
Depreciation | 16,744 | 16,963 |
Stock Compensation and option expense | 995 | 131,068 |
Changes in assets and liabilities: | ||
Accounts receivable | (16,578) | 37,919 |
Inventory | $ 42,154 | (21,492) |
Prepaid expense | (5,825) | |
Accounts payable and accrued expenses | $ 26,783 | 203,876 |
Accrued expenses - related party | 159,180 | 205,712 |
Net cash provided by (used in) operating activities | $ (29,390) | $ 124,267 |
Cash Flows From Investing Activities: | ||
Cash Flows From Financing Activities: | ||
Net increase (decrease) in cash and cash equivalents | $ (29,390) | $ 124,267 |
Cash and cash equivalents, beginning of period | 182,916 | 135,954 |
Cash and cash equivalents, end of period | 153,526 | 260,221 |
Supplemental Disclosures | ||
Cash paid during the period for interest | 14,503 | 10,898 |
Cash paid during the period for taxes | $ 0 | $ 0 |
ORGANIZATION AND OPERATIONS
ORGANIZATION AND OPERATIONS | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND OPERATIONS | NOTE A - ORGANIZATION AND OPERATIONS ORGANIZATION Enviro Voraxial Technology, Inc., an Idaho corporation (the Company), is a provider of environmental and industrial separation technology. The Company has developed, and now manufactures and sells its patented technology, the Voraxial® Separator, a technology that efficiently separates liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. Current and potential commercial applications and markets include oil exploration and production, oil refineries, oil spill, mining, manufacturing, waste-to-energy and food processing industry. Florida Precision Aerospace, Inc., a Florida corporation (FPA), is the wholly-owned subsidiary of the Company and is used to manufacture, assemble and test the Voraxial Separator. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2015 | |
Notes to Financial Statements | |
GOING CONCERN | NOTE B - GOING CONCERN The Company has experienced recurring net losses and a working capital deficiency as of September 30, 2015. There is no assurance that the Company's sales and marketing efforts will be successful enough to achieve a level of revenue sufficient to provide cash inflows to sustain operations; however, the Company continues to experience customer interest and forecast revenues to increase in 2015. While the Company anticipates increase in sales of the Voraxial Separator during 2015, the Company may continue to require the infusion of capital until operations become profitable. As a result of the above, there is a substantial doubt about our ability to continue as a going concern and the accompanying condensed unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES INTERIM FINANCIAL STATEMENTS The interim financial statements presented herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the companys annual financial statements, notes and accounting policies included in the companys annual report on form 10-K for the year ended December 31, 2014, as filed with the sec. In the opinion of management, all adjustments, which are necessary to provide a fair presentation of financial position as of September 30, 2015, and the related operating results and cash flows for the interim period presented, have been made. The results of operations, for the period presented are not necessarily indicative of the results to be expected for the year. PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the parent company, Enviro Voraxial Technology, Inc., and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated. ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ. Significant estimates include allowance for doubtful accounts, deferred tax asset, allowance for inventory obsolescence and valuation of stock-based compensation. REVENUE RECOGNITION The Company derives its revenue from the sale and short-term rental of the Voraxial Separator. The Company presents revenue in accordance with FASB new codification of Revenue Recognition in Financial Statements. Under Revenue Recognition in Financial Statements, revenue is realized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. Revenues that are generated from sales of equipment are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of September 30, 2015 and December 31, 2014, there was $627,890 and $465,290, respectively, of deposits from customers. The Company recognizes revenue from the short term rental of equipment, ratably over the life of the agreement, which is usually one to twelve months. FAIR VALUE OF INSTRUMENTS The carrying amounts of the Company's financial instruments, including cash and cash equivalents, inventory, accounts payable and accrued expenses at September 30, 2015 and December 31, 2014, approximate their fair value because of their relatively short-term nature. Disclosures about Fair Value of Financial Instruments, requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation. The company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of September 30, 2015 and December 31, 2014. Level 2inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of September 30, 2015 and December 31, 2014. Level 3inputs are generally unobservable and typically reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of September 30, 2015 and December 31, 2014. CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate (FDIC) limits. As of September 30, 2015 and December 31, 2014, balances did not exceed the FIDC limits. INVENTORY Inventory consists of components for the Voraxial Separator and is priced at lower of cost or market. Inventory may include units being rented on a short term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Therefore, these units are included in the inventory of the Company. As of September 30, 2015 and December 31, 2014; September 30, 2015 December 31, 2014 Raw materials $ 201,554 $ 156,668 Work in process - 227,442 Finished goods 176,402 36,000 Total $ 377,956 $ 420,110 FIXED ASSETS Fixed assets are stated at cost less accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from the sales or disposal of assets is the difference between the sales price and the recorded cost less accumulated depreciation less costs of disposal. NET LOSS PER SHARE In accordance with the accounting guidance now codified as FASB ASC Topic 260, Earnings per Share Since the Company reflected a net loss for the nine months ended September 30, 2015 and 2014, the effect of 13,465,000 and 13,465,000 options, respectively, is anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 (ASC 740-10-25). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Business Segments The Company operates in one segment and therefore segment information is not presented. RESEARCH AND DEVELOPMENT EXPENSES Research and development costs, which includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred. ADVERTISING COSTS Advertising costs are expensed as incurred and are included in general and administrative expenses. STOCK-BASED COMPENSATION The Company adopted ASC Topic 718 formerly Statement of Financial Account Standard (SFAS) No. 123(R) effective January 1, 2006. This statement requires compensation expense relating to share-based payments to be recognized in net income using a fair-value measurement method. Under the fair value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period, which is generally the vesting period. Reclassifications Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Companys net loss or cashflows. RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements issued by the FASB, the AICPA and the SEC, did not, or are not believed by management, to have a material impact on the Companys present or future financial statements, except as follows: In August 2014, the FASB issued Accounting Standards Update ASU 2014-15 on Presentation of Financial Statements Going Concern Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. In April 2015, FASB issued Accounting Standards Update (ASU) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2015, FASB issued Accounting Standards Update (ASU) No.2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE D - RELATED PARTY TRANSACTIONS For the nine months ended September 30, 2015, the Company incurred salary expenses from the Chief Executive Officer of the Company of $208,950. Of these amounts, $49,770 has been paid for the nine months ended September 30, 2015. The total unpaid balance as of September 30, 2015 is $1,254,511 and is included in accrued expenses related party. For the nine months ended September 30, 2014, the Company incurred salary expenses from the Chief Executive Officer of the Company of $208,950. Of these amounts, $42,800 was paid for the nine months ended September 30, 2014. |
CAPITAL TRANSACTIONS
CAPITAL TRANSACTIONS | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
CAPITAL TRANSACTIONS | NOTE E - CAPITAL TRANSACTIONS WARRANTS AND STOCK OPTIONS The Company follows the provisions of ASC Topic 718, Compensation Stock Compensation. ASC Topic 718 establishes standards surrounding the accounting for transactions in which an entity exchanges its equity instruments for goods or services. ASC Topic 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Companys stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in managements opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon the Companys history of having never issued a dividend and managements current expectation of future action surrounding dividends. Expected volatility was based on historical data for the trading of our stock on the open market. The expected lives for such grants were based on the simplified method for employees and officers. Information with respect to options outstanding and exercisable at September 30, 2015 is as follows: Number Outstanding Exercise Price Number Exercisable Balance, December 31, 2014 13,465,000 $0.05 13,465,000 Issued - - - Expired - - - Forfeited - - - Balance, September 30, 2015 13,465,000 $0.05 13,465,000 The following table summarizes information about the stock options outstanding at September 30, 2015: Exercise Price Number Outstanding at September 30, 2015 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at September 30, 2015 Weighted Average Exercise Price 0.05 13,465,000 8.13 0.05 13,465,000 0.05 Total 13,465,000 - - 13,465,000 - The following table summarizes information about the stock options outstanding at December 31, 2014: Exercise Price Number Outstanding December 31, 2014 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at December 31, 2014 Weighted Average Exercise Price $0.05 13,465,000 8.91 0.05 13,465,000 $0.05 Total 13,465,000 - - 13,465,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE F COMMITMENTS AND CONTINGENCIES LITIGATION On or about November 17, 2011, a claim was filed in the Broward County Circuit Court in Fort Lauderdale, Florida against the company by Raw Energy Tech, LLC. The plaintiff alleges breach of an oral contract between the parties for the alleged design, fabrication and construction of a prototype power pack. Amount of damages sought are approximately $58,000. We have moved to dismiss the complaint and intend to vigorously defend this action as we believe this claim is without merit. We have accrued an amount in the financial statements to cover our legal expenses as of September 30, 2015. |
MAJOR CUSTOMERS
MAJOR CUSTOMERS | 9 Months Ended |
Sep. 30, 2015 | |
Risks and Uncertainties [Abstract] | |
MAJOR CUSTOMERS | NOTE G MAJOR CUSTOMERS During the nine months ended September 30, 2015, we recorded 58% and 30% of our revenue from two customers. During the nine months ended September 30, 2014, we recorded 70% of our revenue from Customer A, and 18% from Customer B. As of September 30, 2014, 54% of our accounts receivable was due from Customer D, and 37% was due from customer E. |
SUMMARY OF SIGNIFICANT ACCOUN14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Interim Financial Statements | INTERIM FINANCIAL STATEMENTS The interim financial statements presented herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The interim financial statements should be read in conjunction with the companys annual financial statements, notes and accounting policies included in the companys annual report on form 10-K for the year ended December 31, 2014, as filed with the sec. In the opinion of management, all adjustments, which are necessary to provide a fair presentation of financial position as of September 30, 2015, and the related operating results and cash flows for the interim period presented, have been made. The results of operations, for the period presented are not necessarily indicative of the results to be expected for the year. |
Principles of Consolidation | PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the parent company, Enviro Voraxial Technology, Inc., and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated. |
Estimates | ESTIMATES The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ. Significant estimates include allowance for doubtful accounts, deferred tax asset, allowance for inventory obsolescence and valuation of stock-based compensation. |
Revenue Recognition | REVENUE RECOGNITION The Company derives its revenue from the sale and short-term rental of the Voraxial Separator. The Company presents revenue in accordance with FASB new codification of Revenue Recognition in Financial Statements. Under Revenue Recognition in Financial Statements, revenue is realized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectability is reasonably assured. Revenues that are generated from sales of equipment are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of September 30, 2015 and December 31, 2014, there was $627,890 and $465,290, respectively, of deposits from customers. The Company recognizes revenue from the short term rental of equipment, ratably over the life of the agreement, which is usually one to twelve months. |
Fair Value of Instruments | FAIR VALUE OF INSTRUMENTS The carrying amounts of the Company's financial instruments, including cash and cash equivalents, inventory, accounts payable and accrued expenses at September 30, 2015 and December 31, 2014, approximate their fair value because of their relatively short-term nature. Disclosures about Fair Value of Financial Instruments, requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation. The company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of September 30, 2015 and December 31, 2014. Level 2inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of September 30, 2015 and December 31, 2014. Level 3inputs are generally unobservable and typically reflect managements estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of September 30, 2015 and December 31, 2014. |
Cash and Cash Equivalents | CASH AND CASH EQUIVALENTS The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate (FDIC) limits. As of September 30, 2015 and December 31, 2014, balances did not exceed the FIDC limits. |
Inventory | INVENTORY Inventory consists of components for the Voraxial Separator and is priced at lower of cost or market. Inventory may include units being rented on a short term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Therefore, these units are included in the inventory of the Company. As of September 30, 2015 and December 31, 2014; September 30, 2015 December 31, 2014 Raw materials $ 201,554 $ 156,668 Work in process - 227,442 Finished goods 176,402 36,000 Total $ 377,956 $ 420,110 |
Fixed Assets | FIXED ASSETS Fixed assets are stated at cost less accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from the sales or disposal of assets is the difference between the sales price and the recorded cost less accumulated depreciation less costs of disposal. |
Net Loss Per Share | NET LOSS PER SHARE In accordance with the accounting guidance now codified as FASB ASC Topic 260, Earnings per Share Since the Company reflected a net loss for the nine months ended September 30, 2015 and 2014, the effect of 13,465,000 and 13,465,000 options, respectively, is anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented. |
Income Taxes | Income Taxes The Company accounts for income taxes under FASB Codification Topic 740-10-25 (ASC 740-10-25). Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Business Segments | Business Segments The Company operates in one segment and therefore segment information is not presented. |
Research and Development Expenses | RESEARCH AND DEVELOPMENT EXPENSES Research and development costs, which includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred. |
Advertising Costs | ADVERTISING COSTS Advertising costs are expensed as incurred and are included in general and administrative expenses. |
Stock-Based Compensation | STOCK-BASED COMPENSATION The Company adopted ASC Topic 718 formerly Statement of Financial Account Standard (SFAS) No. 123(R) effective January 1, 2006. This statement requires compensation expense relating to share-based payments to be recognized in net income using a fair-value measurement method. Under the fair value method, the estimated fair value of awards is charged to income on a straight-line basis over the requisite service period, which is generally the vesting period. |
Reclassifications | Reclassifications Certain amounts from prior periods have been reclassified to conform to the current period presentation. These reclassifications had no impact on the Companys net loss or cashflows. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recent accounting pronouncements issued by the FASB, the AICPA and the SEC, did not, or are not believed by management, to have a material impact on the Companys present or future financial statements, except as follows: In August 2014, the FASB issued Accounting Standards Update ASU 2014-15 on Presentation of Financial Statements Going Concern Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern The amendments in this Update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. In April 2015, FASB issued Accounting Standards Update (ASU) No. 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2015, FASB issued Accounting Standards Update (ASU) No.2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable. |
SUMMARY OF SIGNIFICANT ACCOUN15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | As of September 30, 2015 and December 31, 2014; September 30, 2015 December 31, 2014 Raw materials $ 201,554 $ 156,668 Work in process - 227,442 Finished goods 176,402 36,000 Total $ 377,956 $ 420,110 |
CAPITAL TRANSACTIONS (Tables)
CAPITAL TRANSACTIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Stock Options Outstanding and Exercisable | Information with respect to options outstanding and exercisable at September 30, 2015 is as follows: Number Outstanding Exercise Price Number Exercisable Balance, December 31, 2014 13,465,000 $0.05 13,465,000 Issued - - - Expired - - - Forfeited - - - Balance, September 30, 2015 13,465,000 $0.05 13,465,000 |
Schedule of Stock Options Outstanding | The following table summarizes information about the stock options outstanding at September 30, 2015: Exercise Price Number Outstanding at September 30, 2015 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at September 30, 2015 Weighted Average Exercise Price 0.05 13,465,000 8.13 0.05 13,465,000 0.05 Total 13,465,000 - - 13,465,000 - The following table summarizes information about the stock options outstanding at December 31, 2014: Exercise Price Number Outstanding December 31, 2014 Weighted Average Remaining Contractual Life Weighted Average Exercise Price Number Exercisable at December 31, 2014 Weighted Average Exercise Price $0.05 13,465,000 8.91 0.05 13,465,000 $0.05 Total 13,465,000 - - 13,465,000 |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||
Raw materials | $ 201,554 | $ 156,668 |
Work in process | 227,442 | |
Finished goods | $ 176,402 | 36,000 |
Total | $ 377,956 | $ 420,110 |
SUMMARY OF SIGNIFICANT ACCOUN18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Deposits from customers | $ 627,890 | $ 465,290 | |
Antidilutive Securities Excluded from Computation of Earning Per Share | 13,465,000 | 13,465,000 | |
Maximum [Member] | |||
Estimated useful life of assets | 10 years | ||
Minimum [Member] | |||
Estimated useful life of assets | 5 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Accrued Salaries | $ 1,254,511 | $ 1,095,331 | |
Chief Executive Officer | |||
Salary expenses incurred | 208,950 | $ 208,950 | |
Salaries paid | 49,770 | $ 42,800 | |
Accrued Salaries | $ 1,254,511 |
CAPITAL TRANSACTIONS (Details)
CAPITAL TRANSACTIONS (Details) | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number Outstanding | |
Balance at December 31, 2014 | 13,465,000 |
Issued | 0 |
Expired | 0 |
Forfeited | 0 |
Balance at September 30, 2015 | 13,465,000 |
Exercise Price | |
Balance at December 31, 2014 | $ / shares | $ 0.05 |
Issued | $ / shares | 0 |
Expired | $ / shares | 0 |
Forfeited | $ / shares | 0 |
Balance at September 30, 2015 | $ / shares | $ 0.05 |
Number Exercisable | |
Balance at December 31, 2014 | 13,465,000 |
Issued | 0 |
Expired | 0 |
Forfeited | 0 |
Balance at September 30, 2015 | 13,465,000 |
CAPITAL TRANSACTIONS (Details 1
CAPITAL TRANSACTIONS (Details 1) - Exercise Price One Member - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Exercise Price | $ 0.05 | $ 0.05 |
Number Outstanding | 13,465,000 | 13,465,000 |
Weighted Average Remaining Contractual Life | 8 years 1 month 17 days | 8 years 10 months 28 days |
Weighted Average Exercise price | $ 0.05 | $ 0.05 |
Number exercisable | 13,465,000 | 13,465,000 |
Weighted Average Exercise Price | $ 0.05 | $ 0.05 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Value of damages sought | $ 58,000 |
Description of Damages Sought | On or about November 17, 2011, a claim was filed in the Broward County Circuit Court in Fort Lauderdale, Florida against the company by Raw Energy Tech, LLC. The plaintiff alleges breach of an oral contract between the parties for the alleged design, fabrication and construction of a prototype power pack. Amount of damages sought are approximately $58,000. We have moved to dismiss the complaint and intend to vigorously defend this action as we believe this claim is without merit. We have accrued an amount in the financial statements to cover our legal expenses as of September 30, 2015. |
MAJOR CUSTOMERS (Details)
MAJOR CUSTOMERS (Details) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Customer One | ||
Percentage of revenue from Major customer (as a percent) | 58.00% | |
Customer Two | ||
Percentage of revenue from Major customer (as a percent) | 30.00% | |
Customer A | ||
Percentage of revenue from Major customer (as a percent) | 70.00% | |
Customer B | ||
Percentage of revenue from Major customer (as a percent) | 18.00% | |
Customer D | ||
Percentage of accounts receivable from Major customer (as a percent) | 54.00% | |
Customer E | ||
Percentage of accounts receivable from Major customer (as a percent) | 37.00% |